SkyWater acquiring Infineon’s Austin fab

SkyWater Technology entered an agreement with Infineon Technologies AG to purchase Infineon’s 200mm fab in Austin, Texas (Fab 25) and a corresponding long-term supply agreement. SkyWater will operate the fab as a foundry, increasing available capacity in the U.S. for foundational chips on nodes from 130nm down to 65nm critical for many industrial, automotive and defense applications. Fab 25 will also increase SkyWater’s scale as a foundry and provide additional capabilities such as 65nm infrastructure, expanded copper processing scale and high-voltage Bipolar-CMOS-DMOS (BCD) technology. The long-term supply agreement will enable Infineon to maintain a strong, efficient and scalable manufacturing footprint in the United States.

Infineon and SkyWater believe this strategic partnership will enhance the long-term viability and utilization of Fab 25. The transaction also affirms the long-term perspective for nearly 1,000 manufacturing jobs at Fab 25, since all current Fab 25 employees will become SkyWater employees as part of the agreement.

SkyWater is a U.S.-based company with access to a broad customer base and a Trusted supplier of the U.S. Department of Defense. SkyWater believes the transaction will allow it to realize significant economies of scale, bring high-value manufacturing services to SkyWater’s customers and support dual sourcing strategies for critical industries. Furthermore, SkyWater plans to transition the Fab 25 business model from Integrated Device Manufacturer (IDM) to foundry to bring substantial manufacturing capacity to a broad base of new customers over time. Foundational semiconductors are of strategic importance for several U.S. industries, including the defense sector. The partnership will strengthen the industrial base and domestic semiconductor supply chain in the U.S. as well as the resilience for critical foundational semiconductor technology. The closing of the transaction is subject to regulatory approval in the U.S. and is expected in the coming months.

“The transaction fully aligns with Infineon’s manufacturing strategy to create synergies with strategic foundry partners when in-house manufacturing does not offer competitive advantages,” says Alexander Gorski, Executive Vice President and Head of Frontend Operations at Infineon. “The partnership with SkyWater creates mutual benefits and synergies, supports our profitable growth and provides us with a strong and trusted foundry partner, thereby safeguarding our long-term supply base in the U.S. We commend the contributions the Fab 25 team has made to our operations and thank the Austin community and our local and federal partners for their support and collaboration.”

“This milestone expands our partnership with Infineon and significantly increases our U.S. foundry capacity. We expect it will also enhance supply chain resilience for foundational chips that are critical to sensitive strategic applications, thereby strengthening both national and economic security,” says Thomas Sonderman, SkyWater CEO. “This investment is an expansion that enhances our ability to serve both our defense and industrial customers. By leveraging the proven expertise of the talented team in Austin, we are positioning this fab as a cornerstone in the U.S. semiconductor foundry network—one that will extend our capabilities to support defense programs while also enabling new opportunities in commercial markets.”

The U.S. is a key business region for Infineon with around 4,000 employees, 15 locations dedicated to research and development activities and 1,000 employees in R&D roles. Infineon serves a multitude of American customers across all its market segments in automotive, industrial & infrastructure, as well as consumer, computing & communications. Currently, up to one billion semiconductor chips per year for major automotive, industrial and communications companies are manufactured in Fab 25.